In Shakti Bhog Food Industries Ltd. v. The Central Bank of India and Anr.[1], the Hon’ble Supreme Court has clarified as to when the three-year limitation period contemplated under Article 113[2] of the Limitation Act, 1963 (Act), commences. It has also reiterated the importance of considering the averments made in a plaint as a whole while determining an application for rejection of plaints under Order VII Rule 11[3] of the Code of Civil Procedure, 1908 (CPC).
The disruption that Covid-19 has brought about is for everyone to see. Businesses across all sectors have been severely impacted due to the several versions on lockdown orders issued by the central and state governments from time to time.
Given that all enterprises continue to scamper to preserve cash and reduce costs, one of the major payouts that all businesses are actively trying to avoid or minimize exposure to is rental payouts. Two of the most obvious questions in this regard have been:
Continue Reading The Doctrine of Suspension of Rent – A Silver Lining for Tenants?
After more than three months of lockdown, there is no denying that the Indian economy has been impacted. This is also evidenced by the stimulus packages announced by the Government of India, in an attempt to protect and revive the economy. With most people staying indoors 24*7, electricity consumption in the commercial sector was also impacted initially, although the levels have been restored in a phased manner. This coupled with different lockdown strategies in different states, is also continuing to impact business at large. Taking into account the impact of COVID-19 across the globe, and the lockdown in the country, the government of India and certain central agencies have been providing clarification and issuing memorandums/notifications to guide the infrastructure industry, specifically the renewable energy (RE) sector, and RE projects in terms of COVID-19 being declared as a force majeure (FM).
Continue Reading COVID-19 Cloud Cover: Not so sunny times for renewable energy sector!
“The most valuable commodity I know of is information.”
– Gordon Gekko, Wall Street
Over the past few weeks, the Securities and Exchange Board of India (SEBI) has passed three orders[1] (SEBI Orders) in the infamous ‘WhatsApp leak’ saga that has been in the news since November 2017[2]. Holding the impugned perpetrators guilty of violating insider trading regulations, the regulator has taken significant steps in pushing the boundaries of the concepts of insider, UPSI and insider trading.
Continue Reading SEBI and WhatsApp leaks: Every link in the chain matters
Section 34 of the Arbitration and Conciliation Act, 1996 (Act) sets out the grounds on which arbitral awards passed in domestic arbitrations and international commercial arbitrations seated in India can be set aside. As regards foreign awards (i.e. arbitral awards passed in foreign seated arbitrations), whilst the same cannot be challenged in India, the enforcement of the same in India can be validly objected to by the award debtor on grounds that are set out in Section 48 of the Act. The grounds for setting aside arbitral awards passed in domestic arbitrations and international commercial arbitrations seated in India under Section 34 of the Act and the grounds for refusing enforcement of foreign awards in India under Section 48 of the Act are substantially identical. One such ground is if the arbitral award is found to be contrary to the “public policy of India”.
Change is inevitable. Growth is optional.
– John Maxwell
Covid-19 has seen the legal landscape leapfrog into digital courts, electronic filings and asynchronous video hearings. The change has been fundamental and deep deliberations are currently underway for the systemic adoption of a new normal. Such a material shift often facilitates rapid adoption of other innovations that were hitherto stuck at the threshold of a conservative mindset. We believe that Third Party Funding of litigation is one such legal innovation that will now come of age in India.
Continue Reading Cash constrained and need to litigate? Third Party Funding may be the solution
Introduction
The growth and diversification of businesses have led to an increase in white collar crimes. The term ‘white collar crime’ was first defined by Edwin Hardin Sutherland as crimes committed by persons who hold high societal status and repute in their profession. As the complexity of such crimes has grown over the years and investigations have become refined, we have seen an increase in private professional services offering support to companies and their management in dealing with white collar crimes.
These support services extend from providing an in-depth analysis of the crime to the management, carrying out forensic investigations into the affairs of the company, including audit and forensic diligence reports and preparing the company for legal proceedings. The need for internal private investigations has also increased as a result of strengthening of laws on compliances and reporting of white collar crimes. The allegations may vary from offences under the Indian Penal Code (such as fraud, cheating, forgery, etc.) to offences under offences under special statutes (such as money laundering, insider trading, corruption, etc.).
The provisions of the Companies Act, 2013 (the Act), and the rules framed thereunder, mandate companies to file requisite documents, including annual returns and financial statements, with the concerned Registrar of Companies (RoC) of their jurisdiction. Non-adherence to such provisions and non-filing of the requisite documents is an offence, exposing non-complaint companies and its directors to severe penal consequences, including fines and prosecution.
However, the records of the Ministry of Corporate Affairs (MCA) and the National Company Law Tribunals (NCLT) would clearly reveal that a lot of companies have been non-compliant with their filings. This non-compliance has been a menace to all the stakeholders involved, including, inter alia, (i) the companies and directors who have to face penal consequences for such non-compliances; (ii) the MCA and its administration who are engaged in the process of updating the records; (iii) the public/ shareholders who do not get access to the records of the companies; and (iv) the NCLT and the office of Regional Directors, which are burdened with compounding cases.
On June 08, 2020, the Reserve Bank of India (RBI) released two draft frameworks — one for securitisation of standard assets (Draft Securitisation Framework) and the other on sale of loan exposures (Draft Sale Framework). In our previous article (available here), we had dealt with key revisions introduced by the RBI under the Draft Securitisation Framework. This article contains a brief summary of the Draft Sale Framework.
The Draft Sale Framework is addressed to the same constituents as the Draft Securitisation Framework and is expected to operate as an umbrella framework, which will govern all loan transfers (standard and stressed assets).
The Draft Sale Framework is broadly divided into three parts viz., (i) general conditions applicable to all loan transfers; (ii) provisions dealing with sale and purchase of standard assets; and (iii) provisions dealing with sale and transfer of stressed assets (including purchase by ARCs).
Continue Reading RBI’s move to revamp loan transfers in India
To battle the ongoing COVID-19 pandemic, the central government and the various state governments imposed a nationwide lockdown in India. Additionally, to arrest the spread of the pandemic, government authorities and corporates are promoting “work from home”, and wherever necessary to work with minimum work force. Acknowledging the difficulties faced by corporates on account of the threat posed by COVID-19, requiring social distancing in day-to-day functioning, governmental authorities have granted various exemptions and reliefs by issuing circulars and amending rules to ease compliance requirements to be complied by companies.
This blog analyses the recent reliefs and relaxations announced by the Ministry of Corporate Affairs, Government of India (MCA), and the Securities and Exchange Board of India (SEBI), which may have an impact on financing transactions.
Continue Reading Social Distancing while approving financing transactions: MCA, SEBI Relaxations